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April 26, 2008

For the second time in less than two years, an over-confident Sri Lankan Army (SLA) has walked into a deadly trap laid by the Liberation Tigers of Tamil Eelam (LTTE) in the Muhamalai area near Jaffna in the Northern Province of Sri Lanka on April 23 ,2008, and faced a rout. It not only lost over 150 soldiers, who were killed by the LTTE, but also enabled the LTTE to seize a large quantity of arms and ammunition from the battle scene. The LTTE has not had such a bonanza of recovered arms and ammunition since the earlier SLA rout in the same area on October 11, 2006. My assessment of the earlier rout may be seen in my article titled "SRI LANKA: A HEAVY PRICE FOR OVER-CONFIDENCE" available at http://www.southasiaanalysis.org/papers20/paper1989.html.

2. After the rout of October 11,2006, the SLA, as is its wont, had played down the fatalities suffered by it and played up the fatalities which it claimed to have inflicted on the LTTE. Only after the LTTE disseminated details of the fatalities inflicted by it on the SLA, did the latter admit that 139 soldiers were killed by the LTTE. A few weeks later, Lt.Gen.Sarath Fonseka, the chief of the SLA, had gone to the US, inter alia, for a medical check-up in connection with the injuries suffered by him in an unsuccessful attempt by the LTTE to kill him through a woman suicide bomber. Reliable sources reported at that time that during his interactions with American military officers in Washington DC he admitted that the SLA had suffered nearly 400 fatalities on October 11,2006. He allegedly blamed Mr. Gothbaya Rajapaksa, the brother of President Mahinda Rajapaksa, who is the Defence Secretary, for hastily pushing the Army into a battle when it was not yet ready----that too in a terrain which the LTTE knew better than the SLA.

3.After the battle of April 23,2008,the SLA claimed that it suffered 43 fatalities with 33 more soldiers missing in action, but the correspondent of the CNN TV channel and the Agence France Press (AFP) have reported that the fatalities suffered by the SLA were more than 100. Reliable Sri Lankan Police sources estimate the SLA fatalities at about 150. The SLA has claimed to have killed over 100 LTTE soldiers, but the LTTE has admitted only 16 fatalities. In an analysis of the casualty figures, the AFP has pointed out that in the beginning of this year, the SLA had given the total strength of the LTTE as about 3000, but the total number of fatalities which the SLA has claimed to have inflicted on the LTTE since January 1,2008, is 3105, when one adds up all the figures given in the SLA's statements.

4. Since the beginning of this year, the SLA and the Defence Ministry have embarked on a campaign of disinformation regarding the ground situation in the Northern Province. As part of this disinformation campaign, not a day has passed without their reporting some operation or the other resulting in large fatalities inflicted on the LTTE. The purpose of this campaign was to buttress the morale of the soldiers of the SLA and the Sinhalese people, to give themselves in public perception an aura of legendary military prowess and weaken the morale of the LTTE and its Sri Lankan Tamil supporters. According to some critics of the Government, many of the so-called battles reported as part of this disinformation campaign allegedly existed only in the figment of the SLA's imagination.

5. Many tall claims were made as part of this disinformation campaign such as:pin-point intelligence has started flowing from human sources in the Northern Province; many precision air strikes had been made on the LTTE's political and operational nerve-centres with the help of such pin-point information; the LTTE's Navy had been practically wiped out; the LTTE's hold in the North was weakening and the SLA would be able to rout it and re-establish its control over the North before the end of this year.

6. One of the basic principles of counter-insurgency and counter-terrorism is that you don't indulge in disinformation in your own territory and directed at your own people. It could prove counter-productive and dangerous by creating a sense of over-confidence in your own troops and people. When the troops realise that they had been sent into battles on the basis of false information and assessments, the credibility of the political and military leadership in the eyes of the people and the soldiers would suffer. The LTTE and its Sri Lankan Tamil supporters know well the ground situation in their territory. They will not be deceived by such a disinformation campaign. It is the Sinhalese public and the soldiers, who will be deceived by it.

7.This is what happened in October,2006, and this is what has happened now. The LTTE did on April 23 ,2008, exactly what it did on October 11,2006. After fighting for some time in the face of an SLA offensive, it pretended to withdraw and vacate a small part of the territory under its control. Thinking in their euphoria that they have defeated the LTTE and forced its retreat, the SLA soldiers rushed into the area vacated by the LTTE and found themselves surrounded by it on all sides. It mowed down the soldiers before they could recover from their surprise.

8. The rout inflicted by the LTTE on the SLA would serve as a morale-booster for its leaders and cadres. It shows that its capability for conventional-style battles is intact and strong in the Northern Province, where the leadership remains united. It had weakened in the Eastern Province following the desertion in March,2004, of Karuna, a capable officer of the LTTE, who looked after its conventional style operations. It was this weakening, which had enabled the SLA to wrest control of the Eastern Province with the help of the Eastern Tamil deserters from the LTTE's army.

9.Over-all, despite the success on April 23,2008, the LTTE's position is still weak for want of an air cover and due to depletion in its arms and ammunition holdings. The battle of April 23 has replenished its holdings to some extent, but not adequately enough. The dilution of the support and sympathy of the international community has been another handicap. However, the motivation and the determination of its cadres are still strong. Any expectations of an easy walk-over in the North nursed by the SLA are likely to be belied unless its air strikes succeed in eliminating Prabakaran, the leader of the LTTE.

10. While continuing with their confrontations on the ground, the Sri Lankan Air Force is trying frantically to eliminate Prabakran through an air strike and the LTTE is trying frantically to destroy the SLAF aircraft on the ground. Neither has succeeded so far. Whoever succeeds first is likely to turn the tide of the war in his favour.

April 25, 2008

In Dr. Upadhyay’s Integral Humanism we see the underpinnings of a school of thought with the notion of Dharma as the overarching moral compass. It clearly repudiates Statism and Theocracy, while standing up for Decentralization to uphold the twin pillars of Individual Freedom and National Interest. The intellectual rut the BJP finds itself in can only be explained in the failure to extend and apply the abstract ideas of Integral Humanism to contemporary issues in a coherent and consistent manner. Offstumped’s articulation of Flat World Hindutva must be viewed in this spirit. READ MORE

That T.R. Baalu was a habitual nepotist should come as no surprise to anyone. What is damning is the extent to which the Prime Minister’s Office went out on a limb to curry favors to his bigamous family business. As the teflon coating peels off Dr. Mamohan Singhis it surprising that the 8 letters written by the PMO should leak in the same week that Rahul Gandhi’s competence to be Prime Minister is tom tommed ?Read More

QUETTA: The Balochistan Liberation Army (BLA) on Thursday reacted strongly to Balochistan Governor Nawab Zulfiqar Ali Magsi’s warning that strong action would be taken against the murderers of a university professor in Quetta.

Bibarg Baloch, chief spokesman of the banned organisation, told Daily Times that the threats issued by the governor would not undermine Baloch “freedom fighters’ commitment to the Baloch cause”. Such threats and espousing the rhetoric of ending the ‘freedom fighters’ separatist activities were as old as the country itself, he said.

The BLA spokesman questioned Governor Magsi’s commitment to addressing the issues facing the people of Balochistan. “The people of Balochistan should remain under no illusion that Nawab Magsi is a Baloch. He has always served the interests of Islamabad. No Baloch should expect any good from him,” he said.

Pakistan People’s Party (PPP) Provincial President Lashkari Raisani also issued a warning to the BLA on Thursday. He said that if the banned organisation rejected offers for talks, it would face action from the government.

The BLA rejected the government’s offer of talks. Asked about the PPP’s call for an all-parties’ conference, the BLA spokesman said it did not support such moves and viewed them as a “sheer waste of time”.

Initially a network of competitive intelligence specialists working in France’s aeronautics industry, the Commission pour l’Information en Entreprise is gradually expanding its remit to new areas like lobbying, security and crisis management.

Bolted on to the Association Aeronautique et Astronautique de France (3AF), the Commission Information pour l’Entreprise (CIpE) boasts a membership of 80 officials in charge of business intelligence in around 40 big French companies and organizations. They meet once every three months to confer on specific issues and working groups counting five or six members are set up to deal with questions involving current events.

Created in 1984 and chaired by Bernard Guillot, the head of business intelligence at the Safran group, the panel recruits its members on the recommendation of other members and takes its cue from a core of the organization’s 10 longest-serving officials (see graph below). Among them are many who attended courses at the Institut des Hautes Etudes de Defense Nationale and several lecturers teaching BI masters’ degree courses at ESIEE, an establishment sponsored by the Paris Chamber of commerce. The CIpE has an outer circle of backers who help organize a business intelligence forum every two years. The next gathering, IES 2008, will be held at the Ecole Centrale de Lyon between Nov. 19-21.

Some members of the CIpE are close to the Group La Fontaine, a more discreet network counting around 30 BI directors of big French firms (IOL 561). And the CIpE shares at least one rule with the Groupe La Fontaine: they close the door on consultants.

This article appears in the April 25, 2008 issue of Executive Intelligence Review.

by Paul Glumaz

The current outbreak of food shortages and famine internationally should come as no surprise to anyone who knows the history of British imperial free-trade policy. To buttress that point, we present here indictments of that policy by two leading statesmen with personal knowledge—Abraham Lincoln's economic advisor Henry Carey, and the founder of modern China, Sun Yat-sen—in addition to this overview article, written in 1991, from the archives of the LaRouche movement.

Before Hitler, there was Britain, and the British famine policy in India.

As many look with horror at the starvation now being induced in Africa by agencies such as the International Monetary Fund (IMF), the General Agreement on Trade and Tariffs (GATT), and the grain cartels, few know that in a previous century the British pioneered all these techniques in India. What follows is a brief outline of the British famine policy in India from 1764 to 1914, and how the British developed the deliberate use of famine and food control as the principal means of rule.

To understand the question of famine in India, one must first start with the fact that India's climate is characterized by the monsoon, in which a region's weather follows the pattern of a dry climate for most of the year; then comes a period of rains, which is the monsoon. At least once in the course of a decade, the monsoon fails to arrive in any given region.

Traditional agriculture in India and other countries always planned for this by laying aside foodstocks at the village level, which ensured that there would be adequate food in drought years. The central administrative authority, whether it was a Hindu prince, or the Moghul court, would suspend taxes for that period of economic insecurity. Prior to British rule, it was understood that famine needed to be avoided if the central authority was to have any legitimacy as the ruler of an area. The British changed all this.

As B.M. Bhatia writes in his 1967 book, Famines in India: "From about the beginning of the eleventh century to the end of the eighteenth there were 14 major famines in India." This is roughly two per century. Under the period of East India Company rule from 1765-1858 there occurred 16 major famines, a rate eight times higher than what had been common before. Then, under the period of British Colonial Office rule from 1859 to 1914, there was a major famine in India an average of every two years, or 25 times the historical rate before British rule! The rest of the world's population was growing due to technological progress, but the population of India remained at approximately 220 million for over a century prior to 1914.

Deliberately inducing a major famine more or less every two years, was, for over half a century, the backbone of British colonial policy in India.

The history of the British in India is a history of the deliberate creation of famines. Such famines resulted from the policies of the East India Company. Those policies included looting through "tax farming," usury, and outright slavery of the indigenous population.

As we shall see, a limit to this rapine was reached in the middle of the 19th Century, leading to the first struggle for Indian independence, which began with the Sepoy Mutiny. Following that revolt, a new policy was developed by the British Colonial Office, which took over all the operations of the East India Company. The new policy revolved around creating famines in selected regions on a continuous basis, with the goal of creating a mass of starving people who could be used as slave labor, needed by the British to build the infrastructure of British rule.

East India Company RuleThe British East India Company began the administrative takeover of India in 1764-1765. The company was appointed diwan, or governor, over the area of Bengal by the collapsing Moghul Empire. The British entered India as the administrative rulers and tax collectors of the Moghul court.

As tax collectors, the previous supposedly "rapacious" Moghul agents, had collected the marketable equivalent of £818,000 sterling from the area of Bengal. In 1765-66, the first year of East India Company diwanship, the company was able to collect the equivalent of £1,470,000; and by 1790-1791, this figure had risen to £2,680,000. According to Jean Beauchamp's British Imperialism in India, Warren Hastings, the company's chief officer in India, wrote the following to the company's board of directors in London:

"Not withstanding the loss of at least one-third of the inhabitants of the province, and consequent decrease in cultivation, net collections of the year 1771 exceeded those of 1768.... It was naturally to be expected that the diminution of the revenue should have kept an equal place with the other consequences of so great a calamity. That it did not was owing to its being violently kept up to its former standard."

The great calamity mentioned was perhaps the worst famine in Indian history, which struck the provinces of Bengal, Bihar, and Orissa. It is estimated that no fewer than 10 million perished from starvation. The severity of this famine was a direct result of East India Company looting.

Tax FarmingWhat the Company had done to increase the tax revenue was to set up a system of "outsourcing" the right to tax the land. This is what is known as "tax farming." The tax collector had the right to obtain as much tax as he could get, since he had bought these rights at auction. In turn, the one who was taxed, the registered landholder, called zamindari, was allowed to extract whatever he could for himself and for the tax collector from the poor peasant who worked the land.

The zamindari, who was subject only to the payment of the company's taxes, essentially had complete power over all the land and all its cultivators.

Through this looting system, the Company left nothing in reserve for the times when the monsoons would fail. In addition, little or no maintenance was allowed for the cultivators' infrastructure, such as the irrigation works.

The results were horrendous, as more of India's land area came under Company rule.

The drain of wealth from India based on a tax-farming system, the destruction of native textile industry by the "free market" dumping of British textiles, and the plantation economy of opium, led eventually to a fierce resistance from the communal based population.

This finally led to the Sepoy Mutiny of the zamindaris and others, especially those who lived in areas not totally under Company control. It almost broke the British Empire.

In the end, the East India Company was relieved of its rule in India and was replaced by a governor-general, and a colonial administration. The commission which recommended this change concluded that the problem was the lack of a transportation and communications infrastructure, necessary to hold subject such a vast country. Also, the commissioners concluded, there was a need for an Indian ruling class that would function as intermediaries for the British colonialists.[1]

Slave Labor PolicyBritain's colonial overseers agreed on the need for the development of a rudimentary infrastructure to increase the efficiency of their rule, and looting of India. But the Empire had a problem. The proposed grid of railroads and large-scale irrigation works was too expensive, from the colonialists' point of view. So, the decision was made to force the already plundered Indian population to pay for these development projects.

This presented another serious problem. India, at that time, did not have a landless laboring class which could provide a pool of cheap labor for such projects. The caste system of India was all-encompassing. As Bhitia documents, the ritual distribution of goods at the communal level, based on caste and guild relations, made it undesirable for families and individuals to leave this system, especially to become slaves for the British railroad and irrigation projects.

The British solution to this problem was "famine relief." To build the railroads, the British set up "famine relief works." A famine would create the condition, such that, faced with certain death from lack of food, an Indian would be forced to "choose" to go to a famine relief center, much like a starving famine victim in Africa would do today. However, once having done this, the individual lost his caste relations and privileges. Then he was told that if he wanted to continue to eat, he must work, building the railroad in exchange for food.

At these projects, less than minimum subsistence was the norm, much like a Nazi forced-labor concentration camp. As yesterday's famine victims dropped dead from exhaustion and slow starvation on the railroad or irrigation project, today's famine refugees were making their way into this so-called famine relief system. This system would today be labeled euphemistically, the "recycling" of the work force.

With the advent of railways, it became easier for traders to buy up food and other goods when they were cheap, and in some cases, even when costly, and export them to England—much in the same manner as the British let the Irish starve during the potato famine, rather than allow the wheat, barley, and rye grown in Ireland for England to be used to feed the Irish.

Under these conditions, the nature of famines and scarcities began to change. Whereas in the past, famine had been a regional phenomenon, under this British policy food became scarce throughout the country, hitting the poorest in a devastating manner. It was these famine-stricken poor who then continued to supply the labor for the relief-works.

Rise of UsuryThe development of the railroads also helped to develop a class of Indian money-lenders, who became the intermediaries for the British. This allowed for the British to control even areas which were not affected by crop failures.

Such areas were hit with multiple increases in prices because of the demand placed on their food from other areas of the country. Money-lenders would then sell British goods to Indians at inflated prices, and buy their grain at low prices. Then they would sell that grain at high prices, either on the international market, or back to the same people in times of famine.

Since these transactions were carried out largely on a credit basis, vast segments of the population became debt slaves to the money-lenders, if they were fortunate enough to escape having to work on famine relief projects. In addition, the British played this system of debt-slavery off against the traditional caste and guild system, which had never had to deal with such a monstrosity.

This system brought to the fore a class of money-lenders who became the power through which the British were able to offset, in part, the resistance within India to their rule coming from the communal base.

The spread of famine throughout India can be measured in the expansion of the railroad system. There were 288 miles of rail in India in 1857; 1,599 miles in 1861; and 3,373 miles in 1865. By 1881, there were 9,891 miles; there were 19,555 miles by 1895; and 34,656 miles by 1914.

With the expansion of the railroads, and "famine relief" which built the railroads, the exports of food grains rose rapidly. The export of rice grew from 12,697,983 hundred-weight in 1867-68, to 18,428,625 hundred-weight in 1877-78. Wheat exports grew 22-fold during this same period, from 299,385 hundred-weight to 6,373,168 hundred-weight. The criminal nature of this policy is clearly seen, since 1876-78 were major famine years. The export of rice reached 30.3 million hundred-weight, and wheat reached 30.3 million hundred-weight in 1891-92.

The worst famine was in 1896-97, which affected 62.4 million people. This resulted, among other things, according to Bhatia, in "civil commotion and unrest in Bombay against continuing exports of food grains from the presidency at a time when the people faced the threat of famine. The government of India, however, refused to change its food policy and steadfastly clung to the view so far held that, 'even in the worst conceivable emergency, so long as trade is free to follow its normal course, we should do far more harm than good by attempting to interfere....' "

Does this sound all too familiar? The [George H.W.] Bush Administration has proclaimed a New World Order based on "free trade" and an end to the "restrictions" imposed by national sovereignty. As food and other basic resources increasingly come under the control of Euro-Anglo-American cartels, most of the world is slated to become much like India was under the British.

Bush's New World Order is in fact nothing new, and the principal instrument of rule in this new world order is scheduled to be famine, and "famine relief" projects for the victims.

If people don't wake up, a day will come when you may lose your cherished low-paying job, and find yourself homeless and on the soup line—only you will be told there's no slop to eat, unless you join a work gang.

Slave labor, famine, and government-protected drug lords, like the British East India Company, are to be your masters in this New World Order. It has been done before!

Now maybe you will think twice when you view the British Broadcasting Corporation's films of the "glorious days of the British Raj in India" which you see on PBS. British policy in India was nothing less than deliberate genocide. We face the same policy today, this time on a global scale.

[1] See Eric Stoakes, "Traditional Elites in the Great Rebellion of 1857," and "Some Aspects of Revolt in Uper Doab," in E.R. Leach and S.N. Mukherjee (eds.), Elites in South Asia (Cambridge, 1970).

This March, it has been five years since the US and British invasion of Iraq. The intervention led to the fall of S. Hussein's regime and the occupation of the country.

A grand lie served as the pretext for the military offensive – the US and British intelligence agencies claimed that Iraq possessed a stockpile of weapons of mass destruction that could be used against the West any moment. When no weapons of mass destruction were found in Iraq, it was alleged that the Iraqi leadership had ties with Al Qaeda. Eventually, Washington justified the invasion of Iraq by the need to set the Iraqi nation free from S. Hussein's dictatorship and to establish democracy in the country.

The actual reasons behind the US intervention in Iraq are thinly disguised. Washington pursued two objectives. The first one was to rout the most powerful Arab country which posed the greatest threat to Israel (Israel is a strategic ally of the US and the Israeli lobby has a significant if not decisive influence over Washington's foreign politics). Iraq used to be a source of considerable material and military support for the Palestinian resistance movement. Palestinian guerillas were trained in Iraq and returned to it for medical treatment when necessary. The second US objective was to seize control over Iraq's oil resources and to gain a strategically important foothold in the Middle East.

The first of the two objectives was accomplished by the US easily and completely. Iraq is devastated and no longer poses a threat to Israel. It is unlikely to regain the status of a major regional player in the foreseeable future. As for the second objective, the US encountered a number of serious obstacles in achieving it.

On the one hand, the occupation of Iraq and the deployment of the US forces counting over 160,000 servicemen (plus those of the rest of the coalition) did make it possible for the US to control Iraq's oil industry and the admission of foreign companies to the Iraqi oil fields. On the other hand, the political instability, the sectarian violence, and the terrorist activity which resulted from the US invasion and the elimination of S. Hussein's regime have become the chronic problems of Iraq.

The US failed to establish a political regime in Iraq that would both remain under Washington's control and enjoy a broad support among Iraqis. No efforts to create normal living conditions for the population were made by the occupation authorities. Numerous acts of violence and the indiscriminate use of force by the coalition troops resulted in massive collateral damage and echoed with a Jihad declared by various Iraqi Muslim extremist groups led by Al Qaeda. Iraq turned into the focal spot of the Jihadist activity attracting dozens of guerillas from all parts of the Muslim world and even from European Muslim communities. According to Egyptian papers, some 200 guerillas from Morocco and Algeria alone were involved in terrorist acts in Iraq in 2007.

Three “centers of power” - the Shia, the Sunni, and the Kurdish ones - shape the domestic political situation in Iraq. All of them include factions supporting the occupation regime and those fighting against it. There is intense struggle between the “centers of power”, particularly the Shia and the Sunni ones, and the sides often resort to terrorism in the process.

The occupation administration adopted the strategy of eliminating the institutions of the former Iraqi political regime which were mainly staffed by the Baath members (who were, for the most part, Sunni Muslims). A new constitution was adopted in Iraq after a referendum in October, 2005. Parliamentary elections were held and a national government was formed in December 2005. Since the democratic procedures were implemented in the situation of the occupation by the coalition forces and the rise of the terrorist activity, the result absolutely cannot be regarded as reflecting the will of the population. From the start, the elections were intended as a disguise for the occupation regime. Moreover, the US chose to rely on the Shia part of the population and the Kurds due to their hostility to the former “mainly Sunni” regime of S. Hussein.

Nouri al-Maliki, a Shia politician and formerly a staunch opponent of S. Hussein's regime became the Prime Minister of Iraq. He lived for a long time as an émigré in Iran and, as Arab media say, had personal contacts with the current US Administration. Jalal Talabani, a Kurdish political leader, became the Iraqi President. The Iraqi Kurds were granted a broad autonomy and practically established their own state in the Iraqi Kurdistan. It has its separate government and armed formations which, according to some sources, were created with a considerable financial and military assistance of Israel. The Iraqi Kurds have the right to independently enter into contracts with foreign countries to develop oil field in the Iraqi Kurdistan and receive most of the corresponding oil export revenues. The Iraqi Kurdistan, as well as Iraq in general, is destabilized by the protracted armed conflict between the Kurdish Workers' Party (PKK) guerillas and the Turkish army, which unfolds in the regions bordering Turkey.

The Shia community holds most of the posts in the Iraqi state institutions. The coalition representing the Shia part of the population also has the majority of seats in the parliament. Its most influential member-parties are the Dawa led by N. al-Maliki and the Supreme Islamic Iraqi Council (previously known as Supreme Council for the Islamic Revolution in Iraq) led by Abdul Aziz al-Hakim. The council has its own armed groups known as the Badr Brigades. They were created in Iran during the war with Iraq in the 1980-ies, recruited the Iraqi Shiites hostile to the regime of S. Hussein, and subsequently continued to receive funding and weapons from Iran. After the fall of S. Hussein's regime, the Supreme Islamic Iraqi Council started to cooperate actively with the occupation authority while still receiving support from Iran. Some sources attribute the arrangement to a secret deal between Iran and the US.

The movement led by Muqtada al-Sadr is another influential Shia force which also maintains its own armed groups known as the Mahdi Army and is supported by Iran. However, Muqtada al-Sadr's movement is anything but loyal to the US. The Mahdi Army has fought against the US forces a number of times, the most severe conflict being the one that erupted in the Shia city of Fallujah. Muqtada al-Sadr declared a 6-month truce in August, 2007, but clashes between the local units of the Mahdi Army and the Iraqi government forces supported by the US aircrafts resumed in Basra on March 25, 2008. The US sources said that Iranian special forces fought in the ranks of the Mahdi Army. At the same time, rallies were held in Bagdad by the supporters of Muqtada al-Sadr which also ended with clashes with the government and the US forces.

The interior conflict in the Iraqi Shia community is typically explained by N. al-Maliki's attempts to limit the growing influence of Muqtada al-Sadr over it, and particularly by the Prime Minister's efforts aimed at expelling the Mahdi Army from the Basra region as the October, 2008 regional elections are drawing closer. So far, the attempts to disarm the Mahdi Army units failed. Despite Muqtada al-Sadr's call for a ceasefire, clashes continued till mid April, 2008.

The Shia “center of force” is trying to drive the Sunni population from the predominantly Shia regions of Iraq. Both the Shia unofficial armed groups and the official state agencies dominated by members of the Supreme Islamic Iraqi Council and Muqtada al-Sadr's supporters and are employed in the process. The Sunni community is not as broadly represented in the authority institutions and the parliament, though it also has its parties and armed units. Those were created with the help of the US and a number of Arab countries, mainly the Saudi Arabia, to fight against the groups related to Al Qaeda such as Junud Allah (Soldiers of Allah) and Ansar Allah (Warriors of Allah). The Sunni guerillas also take part in armed hostilities with the Shia groups.

Currently the domestic political situation in Iraq can be described as a total chaos. It is affected by a range of outside forces including the US troops and its allies, Iran, Turkey, and Israel.

The price paid by the US and the much greater price paid by Iraq for the “liberation from dictatorship and the establishment of democracy” happened to be much higher than expected by those who planned the intervention. The US casualties in Iraq as of March 1, 2008 totaled 4,000 dead and tens of thousands injured. Some 200,000 Iraqis were killed and over 500,000 injured. The number of Iraqi refugees reached about 1,000,000. Iraq suffered severe economic and cultural damage (the Iraqi territory is in fact one total museum, and many of the artifacts were damaged or destroyed during the hostilities).

The US presence in Iraq will continue under any scenario. G. Bush's Administration hopes to sign a new treaty with the Iraqi government which will set no deadline whatsoever for the withdrawal of the US troops from Iraq. As for the Democratic presidential hopefuls H. Clinton and B. Obama, even though they do opine in favor of pulling the troops out of Iraq, they say that an immediate withdrawal is not an option as the result would be the strengthening of Iran's positions in the country.

For years to come Central Eurasia is going to be the most happening field in international politics. Though the situation there is in constant flux and the principle of certitude fails, it would be naïve to ignore the importance of the region due to its geostrategic location and resources. Interestingly, Central Eurasia as a concept has eluded the scope of a proper definition. John Schoeberlein an expert in the area attempts at a broader definition under which he includes ‘lands from the Iranian Plateau, the Black Sea, and the Volga Basin through Afghanistan, Southern Siberia, and the Himalayas to Muslim and Manchu regions of China and the Mongol lands.’ Robert M. Cutler employs seven scales of analysis in his theory on Central Eurasia. The advocates of ‘Critical geopolitics’ challenge the realist and neorealist theories of international politics and emphasise on role of non-state actors, such as international financial institutions, in both the conceptual and the material construction of the region. However, from a wider perspective the concept can be seen more an interactive than an integrative one. Culture wise, Central Eurasia can be considered as a landscape traversed by not only diverse empires but also by diverse cultures.

The impact of the former Soviet Union, and earlier of the Tsarist rule, on the formation of the socio-political and economic personality of the Central Eurasia can not be ignored. The rule of the Russian empire and the subsequent Soviet Union had brought a kind of uniformity in most parts of the region. However, after the Soviet collapse, the region underwent a radical transformation. A host of forces including clan politics, religion, fundamentalism and feudal system of governance came up or refashioned. Myriad diversities aside, the collapse of the Soviet Union brought these states to the brink of uncertainty. The old communist apparatchik took over the reigns of power. Some of the regimes in this region, especially in Central Asia, are seeking to build legitimacy through adoption of cultural ideologies. There was no requisite formation of civil society structures to work for the promotion of democracy. The weak political institutions appeared increasingly unable to channel the growing energies of the mass in constructive directions. Another crisis that struck these emerging nations is economic backwardness. Besides the demerits of segregated economic developments inherited from the Soviet Union, these societies did not get adequate international aid or investments to boost their economy, especially in the initial stage of their independence. Worse still, the resources remain unexplored and the fear of rising Islamic extremism drives away the potential investors. Though most of territorial disputes are resolved, the remaining conflicts as in the case of Nagorno-Karabakh, Abkhazia or South Ossetia have played havoc in the development of the region.

In the post-Cold War scenario, Central Eurasia assumed importance not only as bridge between East and West, but also having strategic importance far beyond its impacts on immediate neighbours. When energy resources are added to this strategic equation, the region faces a challenging future. Both global markets and the international players are keenly involved in this emerging scenario. Parts of the region such as Caspian Sea basin are rich in energy resources and there are prospects of opening trans-Central Eurasia routes. It is estimated that the Caspian sea basin contains about 200 billion barrels of oil. In the emerging scenario the four major influences in the region can be identified: Russia, the West, led by the United States China, and the ‘new Islamic pole’, involving theocratic and fundamentalist regimes. Among the four, while the first three have more or less political and economic ambitions in the region, the fourth seems to have subtle underpinnings, endeavouring to drive the region towards radicalism. Interestingly, though there is diversity of religious practices in Central Eurasian states, of late the influence of radical Islam has come to forefront. It is reported that the Wahabi variety of Islam, stemmed from the soil of Saudi Arabia, has made enough dent in Central Eurasia. It is widely perceived that one of the major centres of the Al Qaeda in Afghanistan and Pakistan, the rise of the Taliban and the international drug racket owe their existence partly to fragile politics in the region. Whether it is Chechnya or Kashmir or Xinjiang, the international network of Islamic terrorism has its sustenance from the difficult mountain terrains in the region.

While the United States has endeavoured to fill the power vacuum in the Central Eurasian region to suit its interests, Russia and China perceive it as encroachment into their sphere of influence. In 2001 for the first time deployment of the American combat troops took place near the Kyrgyz capital, Bishkek as part of the anti-terror campaign in Afghanistan. It appears that the US has used the massive military build-up in Central Asia to seal the ‘cold war victory against Russia, to contain Chinese influence and to tighten the noose around Iran.’ Worried that the US presence might encourage internal unrest in its Central Asian province of Xinjiang, China held joint military exercises with Kyrgyzstan. In October 2003 Russia’s Defence Minister, Sergei Ivanov, demanded publicly that the Americans pull out within two years. President Putin has signed new security pacts with the Central Asian rulers, allowing Russian troops to set up a new military base in Kyrgyzstan, which lies only 35 miles away from the US airbase.

Turkey and Iran are the major local influences in the region. The Iranian and Turkic influence stem from geographical contiguity of the region and also due to historical ties. Interestingly, the great power involvement in the regional dynamics has further complicated the regional politics. The alignments of Iran with Russia and Turkey with the US have led to further alignments of local nature. For instance, in the regional conflicts like Nagorno-Karabakh the standpoint of the countries of the region are marked by their equations with these alignments. While the Iranian influence is much more distinct in Central Asian countries, the influence of Turkey is more prominent in Caucasian states like Azerbaijan. Central Eurasian languages are also based either on Turkic or on Persian roots, with later Russian influence. But, this impact has also led to sullen memories of rivalries, conquest and empire-building.

It is difficult to say whether various regional organisations such as Commonwealth of Independent States, Eurasian Economic Community, Black Sea Economic Cooperation, Shanghai Cooperation Organisation, etc. can provide the needed sinew to keep the states together on a single platform to raise and meet common issues. Though these organisations can provide opportunity to work together for enhancing security and coping with the future challenges but mutual differences between the countries seem to make difficult the prospects of cooperation. While the states like Georgia, Ukraine, etc. have raised significant differences with Russia, other states of Central Asia and the Caucasus have embroiled themselves with internal problems. The eastward expansion of NATO and inclusion of former Soviet countries in the European Union have made the region susceptible to power politics. The recent controversy over anti-missile shield in Europe, NATO moving closer to Ukraine and the Kosovo crisis can be seen in this context.

Central Eurasia has for a number of years been in the process of becoming a region of major strategic importance. Given the increased competition in the region the importance of Central Eurasia is set to grow. The manoeuvres of the West to fill the power vacuum left by the fall of the Soviet Union, and the attempts by Russia to regain the lost ground, have further accentuated the prospects of a new cold war without ideology. Any instability in Central Eurasia is a matter of common concern for several reasons. First, instability in the region permits the operation and growth of terrorist movements that often have a global reach. Second, the surge of illicit narcotics trade throughout the region provides a major source of funding for these groupings. Third, the Caspian sea basin is an emerging oil producing region which can play an important role in future energy security. Finally, regional conflicts in this volatile area have the potential of developing into major power confrontations.

Despite a slight dip in China's year-on-year consumer price inflation rate to 8.3% in March, from 8.7% in February, inflation remains at the top of the government's short-term policy concerns. According to a regular survey by the People's Bank of China (PBC, the central bank), a new high of 49% of respondents complained that prices were too high in the first quarter of 2008. These sentiments were echoed in a study by a market research firm, ACNielsen, which showed that consumers were cutting back on discretionary spending.

Worrying trends in underlying inflation have emerged, with price rises triggering increases in minimum monthly wage rates and welfare benefits. In Shanghai, for example, the minimum monthly wage rose on April 1st to Rmb960 (US$137) from Rmb840, and unemployment insurance rose to Rmb550 (from Rmb410). Allowances for poor rural households within Shanghai's jurisdiction have risen to Rmb3,200 a year.

In an effort to address concerns that grain shortages might push up food prices in China as they have done elsewhere in Asia, the premier, Wen Jiabao, in April reassured consumers that the country's grain reserves are ample, comprising over 150m tonnes. However, in late 2007 China had nonetheless imposed restrictions on grain exports, and the State Administration of Grain is conducting inspections in Anhui province, following claims by a renowned agricultural scientist, Yuan Longping, that grain reserves in some parts of China are empty. Press speculation about province-wide shortfalls, notably in Guangdong, has been repeatedly denied by the government.

Spiralling inflation prompted the imposition of stricter official controls on the prices of staple goods in late January. These remained in place throughout the first quarter of 2008, but some producers (notably of dairy goods) have been allowed to raise prices. Oil companies have not been successful in similar efforts, and it may be no coincidence that reports of oil product shortages, notably for diesel, re-emerged in March, first in southern provinces, but spreading to Shanghai and Beijing by the end of the month. The government recently announced a large package of compensation to China's top state-owned oil firms, meant to cover their losses on selling refined oil products at state-capped prices. These funds covered the period up to the end of the first quarter of 2008, suggesting that pressure for another rise in retail fuel prices will build in the weeks ahead.

Despite year-on-year growth in broad money (M2) trending down from 18.9% in January 2008 to 16.2% in March, according to central bank data, the PBC's governor, Zhou Xiaochuan, has emphasised the need to maintain the current regime of monetary policy tightening to fend off inflationary pressures. The reserve requirement ratio (the proportion of funds banks must keep as deposits at the PBC) was raised by 0.5 percentage points to 16% with effect from April 25th, following an earlier 50-basis-point increase on March 25th. On March 20th the PBC had also drained Rmb130bn (US$19bn) from the interbank market through repurchases and bill issues.

The government has also supported a continued strengthening of the renminbi against the US dollar, as part of a strategy to curb liquidity inflows through the trade surplus. In early April the renminbi reached a landmark by appreciating above Rmb7:US$1; on April 16th it was trading at Rmb6.99:US$1.

OutlookDespite the headlines Chinese inflation is currently attracting, the Economist Intelligence Unit expects the year-on-year rate of inflation to fall rapidly in the second half of 2008. The key factor will be a cyclical fall in pork prices from the high base in 2007, helped by a restocking of China's pig herds. However, surging global food prices are likely to mean that the deceleration in inflation will not be as swift or deep as we previously expected. We have consequently increased our inflation forecast for 2008 to 5.9% (from 5% previously).

Short-term grain price inflation remains to a large extent dependent on the weather, and there is a risk that a major drought in China could cause price growth to accelerate rapidly. In the longer term, a falling supply of agricultural land, water shortages, and rising fuel and fertiliser costs will put upward pressure on food prices. However, inflation in the cost of manufactures will remain low, owing to intense competition and massive investment. Inflation should slow further in 2009, averaging 3.6%, owing to improving agricultural supply.

Islamabad's new government rethinks its counterterrorism policy as it tries yet another effort to quell violence in the restive Afghan border area, writes Naveed Ahmad for ISN Security Watch.

By Naveed Ahmad in Islamabad (24/04/08)

Bureaucratic reshuffling and policy shifts have been numerous as the ripple effect from elections earlier this year continues through Islamabad. The country's counterrorism policy is no exception.

Instead of continuing its seven-year military operation, Pakistan's new government is reaching out to tribal leaders and notables in the restive Northwest Frontier Province as part of the political element of an overall strategy to quell the insurgency along the border area.

Speaking to ISN Security Watch, Foreign Minister Shah Mahmood Qureshi said, "History suggests that the use of force alone can lead to self-perpetuating violence, but the determination of use of force, wherever required, remains an important element of our strategy."

The new counterterror policy is being supported by a coalition of three liberal political parties – Pakistan Muslim League, Pakistan Peoples' Party and Awami National Party.

While two wanted militants, Mulla Fazalullah and Baitullah Mahsud, remain at large, in a sign of Pakistan's about-face, the new government freed another militant following hectic talks and the signing of a peace agreement on 21April.

Much to the dismay of Washington and Kabul, Tehrik Nifaz Shariat-e-Muhammadi (TNSM) Supreme Leader Maulana Sufi Muhammad was released after signing a six-point agreement with Pakistan. Muhammad led thousands of Pakistani Pashtuns to Afghanistan to fight the coalition forces alongside the Taliban in late 2001.

Muhammad was arrested upon re-entering Pakistan. Released after serving six-and-a-half years in prison, the hardline cleric condemned the elements involved in attacks on the Pakistan army, police and other security officials. He also agreed to convince other rogue elements to lay down their weapons.

However, Muhammad remains committed to working for the enforcement of Sharia in the Malakand region "through peaceful means." Reports about the TNSM first surfaced in 1994 when it started an armed campaign for the enforcement of the Islamic system in seven districts there.

Militant's release a catalyst for peace, hopefullyTwo days after the release of Muhammad, Baitullah Mahsud asked his Taliban followers to "immediately cease their activities" against the armed forces and Pakistani government officials. Islamabad hopes the same will happen with Mulla Fazalullah, who after a high-cost operation in the mountainous Swat region, escaped capture by the Pakistan army.

Fazalullah claimed to carry forward Muhammad's unfinished agenda while the latter was in prison. The government believes that with the release of his mentor and signing of the peace agreement, the local Taliban leader will abandon the insurgency.

Meanwhile, the Pakistani government is also working on a peace agreement with the Mehsud tribe of South Waziristan, seeking an end to militancy and to resolve issues "in accordance with local customs and laws." The agreement could include a military withdrawal and a prisoner exchange.

Reaction to Islamabad's counterterrroism shift has been mixed. UK Home Secretary David Miliband expressed Britain's full support to the new strategy last week. According to reports, Milibrand said that this also included support for talks with militants who wanted to abide by the law. The UK home secretary surprised many when he said the West should not expect overnight success in the war against terror and Pakistan should give the political option another chance now.

In Washington last week, Assistant Secretary of State Richard Boucher told a news conference that the US wanted to ensure that the pledges to end violence and militant activities in the tribal areas were enforced.

"These are the things that we discuss with Pakistani officials all the time [...] this has been a regular subject of conversation with the government of Pakistan," the Pakistani daily newspaper Dawn quoted Boucher as saying. "It is important to negotiate with the tribes [...] to end violence, to end suicide bombing and to end the plotting and planning that happens there. The problem is in enforcement."

Boucher's position seems to contradict the Bush administration, which has cautioned Islamabad that the talks should not halt the ongoing military operations against the militants.

Kabul is also cautious about Pakistan's moves. A spokesman in the Afghan Embassy told ISN Security Watch, "The militants should not [get] breathing time to re-assemble."

Afghan Ambassador to Pakistan Muhammad Anwar Anwarzai said Afghanistan considered negotiations "a welcome step" provided they took place "without any preconditions."

Complex ground realitiesThe situation may be improving on the Pakistani side but clashes are a daily routine along the border. On 21 April, 11 people, including a Pakistani soldier, were killed during a skirmish between Afghan troops and the Taliban.

Some analysts link Muhammad's release with talks over the freeing of kidnapped Pakistani Ambassador Tariq Azizud-Din, who went missing with his driver and guard in Afghanistan-bordering Khyber Agency on 11 February.

Though the Pakistani foreign minister has consistently rejected any linkages between the peace process in tribal areas and release of Muhammad with the efforts to free the kidnapped ambassador, official sources told ISN Security Watch on the condition of anonymity that the hostages may be released soon.

Analysts believe that the chances of achieving peace through political and economic means may evaporate in the absence of patience from the Afghan side. Past efforts to deal with the situation through political means fell flat after US pre-emptive strikes were seen as provocations by some the locals, prompting sympathy toward the Taliban.

For Pakistan's new government, the situation is riddled with complex challenges. Besides international pressure, Islamabad has a serious credibility deficit toward the ever-suspecting Taliban. For a country that witnessed a ten-fold increase in suicide bombings in 2007, as compared to the previous year, and tribal areas being widely seen as the sources of domestic terrorism, options remain limited.

The country's leaders may give a more sympathetic consideration to peace process, owing to its fatigued military and following the exit of the discredited Musharraf regime.

by B. Raman "A puzzling question for the Chinese is: How can India put all its strategic policy eggs in the baskets of three sunset leaders, namely, President George Bush, who will be out next year, Mr. John Howard of Australia, who may be out by the end of this year, and Mr. Shinzo Abe of Japan (he is already out) ? A convergence of views and interests with these sunset leaders will be ephemeral and of uncertain benefit to India and its people, whereas any convergence with the Chinese leadership would be durable and of definite benefit to India and its people. So, it is said. " ---Extract from my article titled "Seeing China From Chengdu" of September 19,2007, available at http://www.southasiaanalysis.org/papers24/paper2381.html

Mr.John Howard, the previous Australian Prime Minister, is out after he and his Liberal/National coalition were defeated in the elections held on November 24,2007 . The policy-makers of other countries, including China, knew that Mr. Howard's days were numbered and that they should not put their policy eggs in his basket. They waited for the Australian elections before undertaking any major policy initiative. When Mr. Kevin Rudd of the Australian Labour Party, succeeded Mr. Howard as the Prime Minister and changed the main contours of Australia's foreign policy, they were not taken by surprise.

2. Indian policy-makers, whose decisions are influenced more by wishful thinking than by hard ground realities, rushed into one initiative after another without waiting for new leaders to emerge in the US, Japan and Australia. They embraced the proposal for a so-called concert of democracies involving India, the US, Japan and Mr. Howard's Australia. They engaged in nuclear castle-building in the air in the fond expectation that Mr. Howard's Australia will support the lifting of restrictions on nuclear trade with India by the Nuclear Suppliers' Group (NSG) when the Indo-US agreement on civilian nuclear co-operation comes up before it and that it would sell uranium to India as it has been selling to China. They joined the five-power naval exercise in the Bay of Bengal in September,2007, involving the navies of India, the US, Howard's Australia, Singapore and Japan.

3. All their big-power castle-building in the air has come down with a crash after Mr. Kevin Rudd took over as the new Australian Prime Minister. One of his first decisions after taking over as the Prime Minister was that Australia would not sell uranium to India. This decision was publicly announced. Another decision being talked about, but not yet publicly announced was that Australia would not support India in the NSG.

4. His second major decision was that Australia would not participate in the concert of democracies and in any other arrangement which might create in China concerns that it was being encircled. That means, no more Australian participation in joint naval exercises which might cause concern in Beijing.

5. His third major decision was to undertake an 18-day visit to countries considered by him as important to Australian interests in order to explain the policies of his Government. Japan and India were not in the list of countries chosen by him. Subsequently, he and his advisers tried to soothen Japanese sensitivities by stressing that the exclusion of Japan from this list did not mean any down-grading of Japan's importance for Australia.

6.China, China, China, China and more of China was the recurring theme of his speeches in the countries visited by Mr. Rudd, who had spent nearly eight years as an Australian diplomat in Beijing and reportedly speaks the Chinese language fluently. The joke in the English-speaking countries visited by him was that he seemed to be more confident in the Chinese language than in English. His English language is as incomprehensible as the sudden turns in Australian foreign policy introduced by him.

7. The only country not surprised by the Australian foreign policy volte face caused by him is China. It had closely studied him during his long years in Beijing. It had correctly assessed his fascination for China and his seeming contempt for India. His indifference to India was apparent during his first overseas tour. Wherever he spoke, his preoccupation was with Australia's relations with the US and China. Hardly any reference to India.

8. Though there are indications that he would favour India becoming a permanent member of the UN Security Council and joining the Asia-Pacific Economic Co-operation (APEC) organisation and that he might visit India later this year, he does not envisage any role for India in any new security infrastructure for the Asia-Pacific region. His poor opinion of the ASEAN, the ASEAN Regional Forum, the ASEAN plus three, the East Asia Summit and the APEC was obvious. During his interaction with a select audience in the Brookings Institution of Washington DC on March 31,2008, he indicated his preference for the six-power group----of which China is a member and India is not--- which has been negotiating with North Korea on the nuclear issue being expanded to constitute the hard core of any new security infrastructure for the region.

9. In his interactions at the Brookings, he sought "common ground" between China and the international community in a bid to make the Asian giant a "responsible stakeholder" contributing to a "harmonious" global and regional order. China has always welcomed the emergence of India as a major Asian power, but one rung below it---- not on par with China. Bejing looks upon China as an emerging world power on par with the US and India only as an emerging Asian power on par with Japan. Mr. Rudd seems to agree with this perspective.

10. It has been reported that during his visit to Washington DC, President Bush could not succeed in making Mr. Rudd agree to support the nuclear agreement with India in the NSG. If true, this would put an end to India's hopes of having the NSG restrictions on nuclear trade with India lifted before the end of the term of Mr. Bush.

11. India's action in welcoming a stop-over by the Iranian President Mr. Mahmud Ahmadinejad at New Delhi on his way back to Teheran after a visit to Colombo later this month and New Delhi's strong rebuttal of the remarks of a US State Department spokesperson on the stop-over are a clear indication that New Delhi has come to terms with the ground realities and is trying to restore the status quo ante in India's foreign policy making before the Prime Minister Dr. Manmohan Singh's visit to the US in July,2005, when the nuclear deal was signed. Since then, there have been major distortions in our foreign policy in favour of the US. Are we seeing the beginning of the end of at least some of these distortions?

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. He is also associated with the Chennai Centre For China Studies. E-mail: seventyone2@gmail.com)

(This may please be read in continuation of my earlier article of November 13, 2007, titled "Iran to Fund Sri Lankan Arms Purchases" at http://www.southasiaanalysis.org/papers25/paper2455.html)

President Mahmud Ahmadinejad of Iran is to visit Sri Lanka for two days from April 28, 2008, in response to an invitation from President Mahinda Rajapaksa, who had visited Iran in November, 2007. His engagements will include the inauguration of the construction of the Iranian-funded (US $ 450 million) Uma Oya hydroelectricity project at Wellawaya in the Monaragala district. When completed, the project is expected to produce 100 megawatts of electricity. The visit is also expected to result in the finalisation of an agreement for Iranian financial and technical assistance for enabling the Sapugaskanda oil refinery to handle Iran’s light crude. This project is expected to result in a further Iranian investment of US $ one billion.

2. In this connection, quoting Sri Lankan media, the "Teheran Times" of April 20, 2008, reported as follows: "Iran will increase its investment in the expansion project of an oil refinery in Sri Lanka up to US$ one billion, Petroleum and Petroleum Resources Development Minister A.H.M. Fowzie said. According to the IRNA office in Tokyo, Fowzie in an interview with Kyodo on Wednesday said: "Iran's President Mahmoud Ahmadinejad has allocated this amount which would cover 70 per cent of the required investment for the refinery's expansion, in the form of a 10 year loan, with a five year exemption period from payment of the loan's instalments." Fowzie added: "Iran had earlier too provided the oil we need free from interest for four months." According to the report, Iran is the largest provider of crude oil to Sri Lanka. According to the Kyodo report, Managing Director Ceylon Petroleum Corporation (CPC) Ashantha De Mel has said that the pilot study for increasing the production of Sri Lanka's only refinery from 50,000 to 100,000 barrels per day has been completed by Iranian oil engineers. De Mel added: "Iran would make the major part of the required investment for expansion of this oil refinery (70 per cent) and the CPC would cover the rest (30 per cent)." Fowzie said the project would yield noticeable benefits for its investors. He said: "From the economic point of view my affiliated ministry too is interested in making investments there." According to Kyodo, De Mel who visited Iran in early April 2008, expects the project's executive phase to begin within the next three to four months. Oil experts predict that Sri Lanka's oil refinery would increase its production after the Iranian oil engineers would end their work within the next two to three years."

3. Iran has also agreed to provide low-interest credit to Sri Lanka to enable it to purchase military equipment from Pakistan and China and to train a small group of Sri Lankan Army and intelligence officers in Iran. A team of about 10 officers has already proceeded to Iran for training after a clandestine visit to Sri Lanka by Brigadier Gen. Qassem Suleimani, the Director-General of Iran’s Quds Force, or the Jerusalem Brigade, which is, inter alia, responsible for covert actions against Israel and for liaison with friendly foreign intelligence agencies. He is expected to come again as a member of the entourage of the Iranian President for further discussions on intelligence co-operation between the two countries.

4. According to reliable sources, Israel is reported to have expressed to Colombo its concern over the developing relations between Sri Lanka and Iran and warned that this could come in the way of supply and sale of Israeli military equipment to Sri Lanka in future. It has been reported by these sources that Sri Lanka has already shared with the Iranian intelligence copies of the instructions, training and maintenance manuals of the Israeli equipment purchased by it in the past and allowed some officers of the Quds Force to inspect the Israeli equipment.

Gazprom has a new investment plan -- a ray of hope for its customers, who are worried that the gas monopoly has neglected its core business in favour of lavish and irrelevant acquisitions.

The firm controls nearly a fifth of the world's natural gas reserves. Yet there is massive wastage. Around 38% of its staff work in 'non-core functions', according to a recent study. These range from the sensible, such as maintenance operators, to the political, such a TV station and financial newspaper -- as well as some downright bizarre holdings, including a fur farm and sausage factory.

New figures released in late March promise spending will be re-oriented to core, gas-focused operations. Acquisitions will be slashed, while investment in producing and transporting gas will rise 39% in 2009, and even more in 2010.

Lavish shopping sprees are all very well, but observers both at home and abroad have assailed Gazprom for ignoring a looming crisis in gas supply:

Russia's economy has expanded more than 7% each year since 2000, propelling demand for energy. Yet gas shortages during a cold spell this winter caused some factories to down their tools. The government sets the gas price within Russia. Unnaturally low tariffs give factories and power stations no incentive to economise on their usage, making the economy unnaturally skewed towards gas, and away from other fuels. Around 90% of homes and businesses lack gas meters, so usage tends to be indiscriminate. 80% of the gas is concentrated in a single area: West Siberia, where three super-giant fields form the lion's share of production. Unfortunately, these fieldsare in terminal decline. Efforts to bring their smaller 'satellite' fields online do little to mask the fact that Gazprom needs to diversify in the far north and east, and that infrastructure investment is needed to extract the gas and bring it to population centres.

The OECD has scolded Gazprom for its 'insatiable appetite' for acquisitions, which have recently included stakes in oil company Sibneft and power operator Mosenergo.

While the plans will reassure customers in Russia and Europe, it will take a lot of will power for Gazprom to actually stick to them. Claims have already surfaced that it will make a 20 billion dollar purchase of rival TNK-BP -- which puts a wrecking ball through its spending target.

April 21, 2008

India is a liberal, democrat, and peaceful country. The leadership in the country from the very beginning has been emphasising on the all corner development. It always followed the policy of ‘being strong and well built’ not for terrorising and overpowering its neighbouring countries but to defend itself in case of alien’s attack and to fight against terrorists’ aggression crop up within the country or infiltration through its neighbouring countries.

It is funds/wealth and amount of resources disbursing upon the defence purposes, which sets direction for the countries defence programme. With these realities keeping in mind the Defence Minister A K Antony said the shortage of funds would not allow hampering the growth of modernisation process. The only need for us is to be careful for the allocated funds must be utilised optimally and judiciously.

The Defence Minister also called upon the scientists to develop ways for attaining the level of modernisation as per the developed countries while inaugurating the bi-annual Air Force Commanders Conference in the capital on Monday.

We cannot be independent in defence sphere unless or until our scientist develop ways to modernise technologies. The purchase of prepared defence material would not always help to be technologically self-sufficient and so the twin process of modernisation and indigenisation demand a pace in the process.

So the Minister calls the scientist fraternity to keep on research and experimenting and pledged lack of funds would not be allowed limiting their ways. He insisted on achieving the twin aim of modernisation but not at the cost of economy of the country. The expenses on defence must be utilised carefully and avoid “waste and duplication.”

Antony simultaneously advised the top brass of Indian Air Force to differentiate modernisation plans into short-term and long-term objectives considering the India’s strategic requirements so as ‘to plug gaps in our defence preparedness.’

Highlighting the alteration in security dimensions across the world, Antony said, “With latest technological advancements fuelling military capabilities, the type and level of future conflicts is rapidly changing from overt to covert warfare. In the present strategic environment, the term security has therefore, assumed a far greater criticality in the realm of trade and energy, than ever before”.

The purpose is not only to enhance Indian Air Force’s strategic reach, but also to enhance its capabilities in terms of space-based assets, air defence, surveillance, modern aircraft, and advanced weapon system. This ways will assist IAF to evolve into a dominant aerospace power and would help in protecting integrity and sovereignty of India.

The top brass of Indian Air Force comprising the Chief of Air Staff Air Chief Marshal FH Major, Air Officers Commanding in Chiefs of IAF Commands and Principal Staff Officers of Air Headquarters for discussing operational challenges before the Air Force are participating in this four-day conference

Yemen is struggling to balance competing forces as it seeks to quell southern protests, a revived political opposition and rekindled northern rebellion, writes Dominic Moran for ISN Security Watch.

By Dominic Moran in Tel Aviv for ISN Security Watch (18/04/08)

With a fragile peace process with northern rebels on the verge of collapse, President Ali Abdullah Saleh's government faces renewed pressure in southern Yemen in the wake of widespread disturbances earlier this month.

At least two people were killed, dozens wounded and close to 300 arrested in a fortnight of often violent clashes between youths and security forces in southern Yemen earlier this month. The protests were ostensibly sparked when military recruiters refused the enlistment applications of two southern youths.

Former members of the South Yemen military claim systematic discrimination in the payment of post-demobilization stipends and subsequent employment of southerners in the military and police, following the 1990 unification of the country and 1994 southern secessionist rebellion.

Referring to the post-unification status quo in the south, Nicole Stracke from the Gulf Research Center in Dubai told ISN Security Watch, "There was discrimination in terms of jobs, money, infrastructure and investments.

"Saleh would put in key positions people who are affiliated [with] him. And given that 70 percent of Yemen government revenue comes from oil, and that south Yemen has the oil, they feel [a sense of] injustice," she said.

The government was forced to send troops and armored personnel carriers (APCs) into the worst affected towns in a bid to quell the protests, establishing checkpoints on the road linking the capital Sana'a to the former South Yemen seat of government, Aden, in an apparent bid to prevent the expansion of the protests.

"Which organizations are directly involved is very difficult to say," an analyst specializing in Yemeni politics currently working in the country told ISN Security Watch on the condition of anonymity.

Quoted by Reuters, Prime Minister Ali Mohammed Mujur claimed on 11 April that the instigators of the disturbances "target Yemen unity and they work on forming illegal entities as a cover to carry out their plots.

"Certainly some of the demonstrators […] in the south are starting to do things that even a year ago would have been unthinkable: carrying old flags from the PDRY [People's Democratic Republic of Yemen/South Yemen]," the political analyst said. "There was the case of someone burning a Yemeni flag this month and they're quite openly calling for secession." Socio-economic crisis

While calls for secession have been heard, a primary force driving recurrent waves of disturbances in the south and elsewhere in recent months appears to be the poor economic management of Saleh's General People's Congress (GPC) and discontent at its untrammeled domination of the governance system.

Public sector and military employment is a fulcrum for southern protests because the security services constitute the largest single employer in a country in which up to 40 percent of the population live in poverty and unemployment stands at anywhere between 20-40 percent.

The analyst who requested anonymity explained that, "What is sparking them [the protests] is part of a much larger grievance against the regime. And what you are starting to see now is an increasingly common narrative between what is going on in the south and what's going on in the north [al-Houthi rebellion].

"At their heart, these demonstrations are about the inability of the government to provide basic services that include most of the people in the decision-making," she said, adding that the wave of southern protests is "building" and looks set to increase in "seriousness." Political challenge

GPC Secretary General Abdul Qader Bajamal has accused the opposition Joint Meeting Parties (JMP) of fomenting the riots, hinting that they were seeking to undermine the government in league with foreign financiers.

The JMP, whose presidential candidate Faisal Othman Bin Shamlan snared just under 22 percent of the vote in the September 2006 election, is made up of the Sunni Islamist Islah party; the former governing party of South Yemen, the Yemen Socialist Party; and various smaller factions.

The opposition coalition has announced that it will boycott inaugural elections for regional governors on 27 April. GPC-dominated local governate and district council members will vote in the elections, guaranteeing that GPC incumbents selected by the president will remain in office.

Sources in Yemen tell ISN Security Watch that there is widespread discontent with the current governors, particularly in the south where many are transplanted northern appointees.

Apparently fearing a strong performance by the JMP in parliamentary elections tentatively scheduled for next year, the GPC has stepped up efforts to fracture the opposition front, spreading rumors that the constituent parties are at odds and that the JMP is a tool of its largest member, the 46-seat Islah party.

Referring to the organization of the 2009 poll, the political analyst said, "The opposition very clearly charges that the ruling party is not going to adhere to international best practices on this. And there is already talk that the election may not go ahead."

Islah, an umbrella movement for Islamists from various streams, is currently moving to expunge memories of its previously close relationship with the GPC, with which it formed a governing coalition until 1997.

Sources in Yemen also tell ISN Security Watch that the political marriage of convenience that is the opposition front is unlikely to hold over time despite the developing organizational capacity and coherence of the central JMP leadership. Al Qaida vs Saleh

The US has ordered all non-essential diplomatic staff to leave the country and has issued a travel warning for its citizens following a mortar attack on its Sana'a embassy compound on 18 March. According to a government official the main suspect in the bombing is al-Qaida militant Hamza al-Dayan.

Al-Qaida in Yemen has stepped up its attacks on government targets and foreign interests and nationals in recent months, conducting a series of audacious assaults that appear to confirm the severing of the long-rumored relationship with the Saleh government – which reputedly enjoyed a modus vivendi with the old al-Qaida leadership.

Stracke explained that US assassination strikes against al-Qaida leaders in the wake of the 2001 USS Cole attack in Aden harbor, and a related government crackdown on the group, led to a period of relative quiet from 2004-2005.

"This changed in 2006 when 23 [jihadi] prisoners escaped. And among them was the leader of the new Yemen al-Qaida group, Nasir al-Wuhayshi," she said.

"He is dangerous because he is younger; has operated in Afghanistan; has combat experience; and he worked with Osama Bin Laden," she said. "He denounces the policy of the old al-Qaida, saying, 'We don't cooperate with the Yemeni government. We are going to be confrontational.'"

Recent attacks have been designed to undermine government revenues with strikes on oil facilities and pipelines and foreign oil companies and tourists. States with troops in Afghanistan have been a particular target, Stracke noted.

There are reportedly concerns among high-ranking Yemeni officials that the renewed violence and reports questioning the detention status of al-Qaida prisoners could endanger relations with the US.

US governmental aid agency Millennium Challenge Corporation has already responded to concerns regarding Yemeni civil reform efforts by confirming that it is reviewing its commitment to the country.

"Even though you have attacks now on US targets I don't think it will undermine US-Yemeni cooperation because it's essential for their war on terrorism that Yemen is under control," Stracke said, explaining that counterterrorism operations in Yemen are intended to attenuate the flow of militants and arms to al-Qaida in Saudi Arabia. Collapse

The rise in al-Qaida attacks comes amid a growing crisis in the north, where February's Qatari-brokered peace agreement with al-Houthi insurgents appears on the verge of collapse.

Government forces and allied tribal factions have fought an on-again, off-again war against a Shia Zaydi faction, styling itself the Believing Youth, for the past four years in the northwestern Sa'ada province bordering Saudi Arabia.

"After the unification the Zaydis became more marginalized," Stracke said. They feel discriminated against "in terms of financial [disbursements]; in terms of posts; [and because] the government basically supported Saudi influence in the north in countering the Zaydis."

Violence flared again earlier this month with 18 killed in fighting between rebels and Bakhtan tribesmen.

"There is some large-scale fighting flaring up again this week," the political analyst confirmed Thursday, adding that it was difficult to develop a clear understanding of the renewed clashes as "there is pretty much a media blackout on what is going on there."

The Zaydis have traditionally dominated the politics of the north with their imamate controlling affairs in the region well into the 20th century. The al-Houthi family are descendants of Muhammad, entitled to traditional leadership roles under the imamate, and al-Houthi's views on the re-establishment of religious authority remain murky.

"The government tries to portray this as a sectarian conflict," the analyst explained. "At a very local level, that is an element, but I personally believe that it is local political grievances that are playing out through this war."

The government has made moves recently that appear to confirm the collapse of the peace deal. Officials have reaffirmed the government's request that Interpol hunt down Yahya al-Houthi, the brother of rebel leader Abdul-Malik al-Houthi and are moving ahead with the trial of an alleged Sana'a al-Houthi support cell.

It was also announced this week that a presidential committee responsible for monitoring the peace agreement would not be traveling to Sa'ada until the rebels come down from their "mountain strongholds."

Stracke believes that growing pressure from al-Qaida may encourage the government to come to terms with the rebels.

The political analyst who requested anonymity explained that the government had previously courted the rebel al-Houthi faction, while also backing local rivals, promoting the instability that led to the conflict.

"It is really a symptom of the nature of government in this country at the moment, that the elite will play off different competing factions for short-term benefit without a much longer term vision of blowback that is likely to come back to haunt them," she said.

Asked if civil and democratic reform were on the cards, the analyst said, "Yemen is facing grave political and economic challenges and a crash is likely if major changes are not implemented immediately.

"Oil production is falling, the costs of basic commodities are rising and political violence is escalating and diversifying. The government must redirect its spending quickly if it is to stave off crisis."

Dr Dominic Moran, based in Tel Aviv, is ISN Security Watch's senior correspondent in the Middle East and the Director of Operations of ISA Consulting.

The tragicomic Olympic-torch tour presents the world with a serious problem. While the West has focused on the chaotic and even amusing aspects (French police on roller-blades, Chinese torch-guards in dark shades on a cloudy day), in China the iconic image is of the young female paralympic fencer Jin Jing struggling to hold the torch from her wheelchair while a grimacing free-Tibet protestor attempts to wrest it from her grasp. As with the Tibetan protests generally, people in the People's Republic of China (PRC) and the world at large see the events of the torch tour in radically different ways.

A similar disconnect characterizes recent Chinese announcements of foiled terrorist plots by Uighurs, the Turkic Muslims from China's Xinjiang region. Several official reports - regarding a raid on an alleged terror cell in Urumqi in January 2008, an attempt by a young Uighur woman and a man to bring down an airliner in March, and Uighur plans to attack tourist hotels and kidnap foreign journalists in April - have all met with skepticism by foreign media and analysts, infuriating Chinese authorities.

Despite unprecedented information interchange, despite more than two decades of Chinese openness to and deep economic integration with the world, and despite the promise of the Olympic moment, there is now a situation in which world public opinion, and that in China, are diametrically opposed. To oversimplify just a bit, the world public views the Chinese as ogres bent on crushing Tibetans, Uighurs, Darfurians, Christians and others. The Chinese public thinks the world is out to get them, and that the west just wants to keep China down.

Chinese censorship and propaganda - starting with the history and civics Chinese children study in school - has a lot to do with Chinese popular attitudes, and arguably the opinion gap would be narrower if information flowed more freely in China. But people outside China are likewise generally poorly-educated about Chinese issues, albeit for different reasons, and their responses to events such as the Tibet demonstrations are similarly shaped by misinformation and emotion.

It does no one any good if China and the rest of the world are separated by this chasm of mutual misunderstanding, the effects of which could linger well after the Olympics are over. It avails little simply to enjoin the Chinese government to tear down its information firewall or teach Chinese schoolchildren a fuller version of Chinese history. Like most criticism at this juncture, this will only seem like piling on the anti-China attacks.

Oddly enough, however, much could be gained if China only learned how to do a better job talking to outsiders about China. China has a plausible rationale for its actions, and need neither look like a bully nor feel beleaguered. But when it comes to public relations, the Chinese authorities - and some increasingly angry Chinese students studying abroad - are their own worst enemy. On message

Here, then, are six suggestions for how China could better represent itself internationally. The benefit of adopting them (in advance of any advice from aside from any new public-relations advisers the Beijing government may hire) would be to reduce misconceptions and tension all around. Remember that what you say to a Chinese audience is heard by the world audience

Until recently, Chinese authorities viewed even local Chinese newspapers as "internal circulation" media which a billion-plus Chinese, but not foreigners, were allowed to read. Those days are over. Since broadcasts, newspapers and everything else are now online, and lots of foreigners understand Chinese, Chinese domestic news gets out. Even stories that are squelched in China get out. It is a cliché, but true, that we live in one media universe. Consider how your statements sound in English

Diatribes by hardline leaders may be aimed to satisfy a domestic Chinese audience, but such rhetoric sounds violent, even hysterical, when translated and broadcast in English. Zhang Qingli, first party secretary in Tibet, infamously called the Dalai Lama a "terrorist"; Xinjiang's first secretary Wang Lequan shouted at a press conference on 9 March 2008 that "those terrorists, saboteurs and secessionists are to be battered resolutely, no matter who they are!" It would have worked better if he simply said "stopped," or "apprehended": words like "battered" or "crushed" merely contribute to the impression that the Chinese government is inherently violent. (True, President Bush often sounds the same way, with his cowboy swagger - but here I rest my case. His world image is nothing to emulate.)

Also, be aware that many Chinese slogans sound quaint, or worse, in English. "The Three Evil Forces" is one example, "the Dalai Lama Clique," another. And don't call it "splittism"! That word, probably originating in a poor translation, is used only in the Chinese context, mainly by the Chinese government's English-language media. "Separatism" means the same thing, but is the term used when similar situations plague other nations. Don't employ ancient or strained historical arguments about territorial questions

What the PRC is most concerned about regarding Tibet, Xinjiang and Taiwan is sovereignty. However, no government in the world today, and none of any consequence ever, has challenged PRC sovereignty in Tibet or Xinjiang. Even the main exile Tibetan and Uighur groups have dropped their calls for independent states, focusing now on "autonomy" and cultural preservation. With regard to Taiwan, the world has patiently followed the "one China" line and awaits resolution of the problem by people on both sides of the straits.

There is simply no need to justify policies in Tibet with the information that a medieval Tibetan king married a Chinese princess. People in the Americas, certainly, don't care about things that happened that long ago, and most people outside China see the princess argument as frankly silly. The British royal family is of German ancestry, but does that mean Berlin owns London? And there will always be a historian to point out that after welcoming the Chinese princess in the 7th century, the Tibetans went on to sack the Chinese capital in the 8th: thus royal marriage hardly proves Tibetan subjection to China.

Likewise, to argue that the Mongols, who conquered both China and Tibet, were really Chinese, so that Mongol rule over Tibet in the 13th century was actually Chinese rule, is a convoluted and easily challenged argument. The same is true for claims that Xinjiang has been part of China since antiquity, claims that ignore the thousand-year gap (from the 8th to the 18th century) when there was no Chinese presence whatsoever in the area (see Eurasian Crossroads: A History of Xinjiang [C Hurst, 2007]). Do consider more recent and more realistic historical precedents

The Qing dynasty, on the other hand, especially in the 18th century, provides precedents and models that could be useful, both for public relations and for the actual resolution of separatist problems. The Qing was an era when Beijing either governed or enjoyed some sort of security oversight in Tibet, Xinjiang, Mongolia and Taiwan as well as in the core provinces of China. Very different administrative systems applied to different places, however, and the empire was characterised by a remarkable tolerance for linguistic, cultural and religious diversity.

In the 1950s, too, the People's Republic of China launched a system that in principle, if not in practice, provided autonomy and cultural preservation for non-Han minorities. Today, amidst so much talk of transnationalism and the search for new models to complement the nation-state system, there is a global need for new approaches to the ideological and political challenges posed by multi-ethnic states. China could well look "back to the future" and with historical honesty and genuine national pride draw upon Qing dynasty or even early PRC precedents to craft creative solutions to questions of autonomy and cultural preservation in Tibet, Xinjiang, Hong Kong, Taiwan and elsewhere. Why not help fix the problems of the western-inspired nation-state with Chinese-inspired ideas? Workable Chinese models might even be adopted by other countries. Don't deny that China has problems; instead, see how they resemble those of other countries

Though China is unique in its scale, what country does not have problems with pollution, corruption or managing the balance between economic growth and welfare for the poorest members of society? Even the disputes with Tibetans and Uighurs, while stemming from Chinese historical circumstances, have parallels elsewhere. Ethno-religious diversity poses challenges in Europe, America, Australia, and other western democracies. India has serious separatist problems, likewise stemming from an imperial legacy. But despite some heavy-handed tactics, India does not suffer the kind of international criticism over its approaches to Assam or even Kashmir that China does over Tibet or Xinjiang. One reason for that difference is Indian openness and the wide-ranging discussion of these issues in its own lively press.

In late March 2008, hundreds of Muslim Uighur women in the city of Khotan in Xinjiang took to the streets; in part, it seems, because of restrictions on the wearing of headscarves in government offices. Chinese media have not reported on this, but news got out anyway, as it will. If you think it is a good policy to restrict the wearing of headscarves in secular public settings, you are not alone: both Turkey and France have similar policies. So why hide the story? Why not join the global discussion over the place of religious symbols in a multicultural, but officially secular, state? Frank admission and thoughtful consideration of such issues would position China beside other large nations, rather than setting China apart, on its own against the world. Let reporters report: transparency engenders credibility

Though you may be able to control the message to an extent within China, internationally you suffer from a lack of credibility as a result of censored and propagandistic news. This is why western media are sceptical about claims of the Uighur terrorist threat, or claims that all Tibetans, except for a small handful stirred up by the Dalai Lama, are happy. Covering up the Sars outbreak was a serious blow to China's public relations worldwide - much worse than the fact of the outbreak itself was.

On the other hand, China's relatively open and cooperative responses to safety problems in exported toys, medicines and other products have helped limit the damage to the Chinese "brand" following these revelations. Believing your own propaganda may worsen your problems: it certainly seems that central Chinese authorities had no idea of the depth and scope of Tibetan discontent before it erupted in March.

On the other hand, China's relatively open and cooperative responses to safety problems in exported toys, medicines and other products have helped limit the damage to the Chinese "brand" following these revelations. Propaganda and message-control thus can provide a certain short-term benefit; but the truth will out, and real knowledge affords real power. So if you listen to, rather than excluding and demonizing, journalists and scholars, both domestic and foreign, China will be better off and will enjoy greater respect from the world at large. Be cool, Beijing

All these six points can be summed up more succinctly: Be confident and honest, not defensive and secretive

The outright denials of the obvious, the virulent rhetoric, the strained historical arguments, the paranoid claims that foreigners cause your problems - all make China look bad. And China does not need to look bad. Moreover, the world needs China not to look bad. China has a great deal to be proud and confident of, with an unprecedented record of poverty alleviation, phenomenal economic growth, glittering new architecture, high-levels of education, a space program, trillions in foreign reserves, a savings rate that is the envy of spendthrift Americans, and what is likely to be a rich harvest of Olympic gold - not to mention a long history and glorious culture.

Sure, China has problems - who doesn't? But no one is going to take Tibet or Xinjiang away from China. If you respond to disturbances in these regions with restraint, with a statesmanlike air "more in sadness than in anger", and demonstrate an interest in attempting to resolve, rather than deny, the economic, cultural and political problems underlying these disturbances, you could earn world understanding and sympathy rather than looking like a bully.

Finally, protect Jin Jing and other Chinese torch-bearers, but otherwise call off that "people's armed police" squad guarding the Olympic torch (see Rowan Callick, "Torch guardians from Tibet crackdown unit," The Australian, 16 April 2008). Let the International Olympic Committee worry about security for its own sacred flame, and let foreign cops wrestle with the foreign protestors attacking foreign torch-bearers - unless you actually want more pictures of Chinese beating up demonstrators splashed all over world media. At the very least, have the guards take off those thuggish sunglasses! This article originally appeared on openDemocracy.net under a Creative Commons licence. To view the original article, please click here.

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